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Car Service City Driving Growth And Bucking The Trends

Car Service City has proven itself to be a robust and resilient operation, having not only survived but thrived in a tough economic climate. With the economy once again on shaky ground, Entrepreneur spoke to company founder Grant Brady to find out exactly what makes the brand such a solid investment.

GG van Rooyen

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Car Service City was founded in 2004. As you undoubtedly know, the global economic crisis hit in 2008, a mere four years after the business was launched. For a young company this is a worst-case scenario.

Establishing and growing a business is hard even at the best of times. When the economy contracts, it can become nearly impossible. Indeed, many companies failed during this time.

But Car Service City didn’t fail. In fact it flourished. Over the last decade or so, the brand has grown massively, now boasting more than 60 franchises nationwide. How did the company manage to buck the trend? Entrepreneur spoke to Car Service City founder Grant Brady to find out.

Car Service City has been around for more than ten years now, and it was still relatively young when the 2008 recession hit. What makes the business so robust and resilient?

We believe our business is recession-proof for two reasons. First, road transport is the main method of transport for South Africans. Because we use our cars so much, we need to keep them in top condition. The maintenance of vehicles is therefore key to keeping them on the road and running smoothly.

This is particularly important when you consider the cost of fuel. Well maintained vehicles will always have a better fuel consumption than their poorly maintained counterparts. Our offering therefore services a large need in the consumer market. We have affordable service guaranteed, the best service at the best price is what we do.

Related: Car Service City’s Success After Switching To Franchising

According to South African statistics, the live vehicle population for cars and station wagons is nearly seven million, which means seven million drivers need affordable vehicle maintenance and service offerings. Car Service City’s mandate to say what we do, and do what we say, along with top-class mechanics and exceptional and affordable service, makes us a strong brand in a world where ‘one-man-band’ mechanics have earned a poor reputation.

Even early on, we managed to create a recognised brand that consumers knew and trusted. We spent a lot of time crafting a marketing strategy that would make Car Service City a recognisable entity. A good example is our ubiquitous ‘flyer guys’, who hand out flyers at traffic lights.

Just about everyone knows what Car Service City’s flyer guys look like. This is one way in which we created a strong brand. We’re much larger and more established now, but we still believe that marketing is crucial. Building a brand is an ongoing process.

Another reason Car Service City is a robust and resilient brand is the thorough and careful selection process that all potential franchisees go through. We don’t necessarily demand loads of business or automotive knowledge, because our head office ensures that each branch is equipped with the trained operators necessary to carry out what our brand says we will deliver, which is affordable service guaranteed.

Company culture is also incredibly important for us. We spend a lot of time making sure that anyone who enters the organisation shares our passion and commitment. It’s all about culture fit. We’re looking for people who will embrace our systems and processes and really live the brand.

A third factor is head office support to franchisees. Any franchise business is only as good as its franchisees. You can’t succeed if your franchisees don’t succeed, which is why we offer training to franchisees and their staff on an ongoing basis. We also make sure that they keep up with the latest trends and stay at the forefront of technological advancements. You can’t allow yourself to become complacent. You always need to move forward, otherwise you’ll get left behind.

Growth that isn’t carefully managed can be impressive in the short-term, but can end in disaster when it comes to the long-term. What is Car Service City’s approach to sustainable growth?

car service city

We have shown very good growth over the last ten or 11 years, but we’ve always been careful not to make growth our only goal. It’s easy to just bring a bunch of new franchisees on board and grow your network quickly, but that kind of growth isn’t sustainable. As mentioned, we make sure that we choose franchisees who will fit in well with the organisation and have a good chance of making a success of things. This takes time, but it’s worth it.

At head office, we never let the growth of the network outstrip the other aspects of the business. It’s important that we are able to supply the necessary help and support to our franchisees, and this means having the right structures, systems and processes in place. So we try to let our ability to provide full support to the entirety of our network dictate the speed of our expansion.

We could grow quicker if we were more aggressive, but we are interested in managed growth that is sustainable.

The group has managed to grow its footprint year-on-year since inception, and we are on track with our growth strategy. We currently have 61 outlets nationwide, and this will hopefully increase in the coming year.

Related: Should You Purchase An Existing Franchise?

Car Service City seems to have a business model that would be more resilient than most. After all, people need to have their cars serviced, even during tough economic times. Is this true? How do you view Car Service City’s position, given the current economic climate?

This is certainly true. We’re in a great position, in that our business model works, regardless of whether the economy is up or down. When times are tough, people hang onto their cars for longer. They’re more careful with their big investments, which means they service and maintain their vehicles better.

When times are good, they sell their cars, which then enter the second-hand market and still need servicing. So we offer something that is always in demand, which puts us in a great position.

I also believe that people tend to gravitate towards brands that they know and trust, especially when times are tough, and Car Service City is thankfully a brand that resonates with consumers. Through our consistent offering and affordable service, marketing and excellent customer service we have created a strong brand presence throughout South Africa. Car Service City is a name that people know and trust.

From head office we ensure everyone has the necessary skills to provide affordable service to customers. It’s up to us to ensure that franchisees and their employees are able to deliver on our brand promise — affordable service guaranteed.

As a franchisor, how do you view your role when it comes to assisting in the success of franchisees? How do you ensure the success of franchisees, even when times are tough?

car-service-city-office

As stated earlier, we don’t believe in just offering initial training, and then leaving franchisees to fend for themselves. We offer continuous training, and also help with the day-to-day running of a franchise by providing proven systems and processes that simplify things.

That said, we realise that franchisees are unique. Needs are different. So we try to help in any way we can. We assess each franchised branch individually. 

How do you see the business evolving over the next five or ten years? What will the industry look like? What will Car Service City look like?

The automotive industry is always evolving, and we’re determined to keep up with this change. Car Service City will adapt its systems and processes as required by the industry. Because of the culture of our business, we are able to stay ahead of the curve and stay up-to-date with industry and technology changes.

As for Car Service City itself, we will continue our growth and expansion. However, we’re determined to make sure that this is managed growth.

Related: Owning A Franchise – Good Idea Or Bad Idea?

What, in your opinion, makes a Car Service City franchise a solid investment?

grant-brady-car-service-city

We’re fortunate in that we operate within something of a recession-proof industry, but it’s about more than that. In my opinion, one of the biggest reasons that Car Service City is such a solid investment is the level of support offered by head office. The help and support we offer stretches across marketing, IT, human resources, legal, branding, etc.

We ensure that franchisees are able to keep their promises to their customers. Head office ensures that staff are skilled and equipped to handle their roles at Car Service City branches across the country, from managers to secretaries and mechanics.

Solid investments require solid foundations. We focus on getting the basics right. South Africa’s vehicle-dependent environment means that we offer a much-needed product, but the reason we are chosen above our competitors is that consumers feel that we are trustworthy, and that their cars will be serviced and maintained without being taken advantage of or ripped off.

Another reason Car Service City is successful is its strong brand. Having a recognisable name that consumers know is very valuable and providing a service that there is a high demand for in South Africa means that we are a name associated with affordability and trustworthiness. It just makes it so much easier to get up and running. You don’t need to ‘prove’ yourself to the same extent that an independent operation does. You have the strength of the name behind you.

Finally, Car Service City provides a proven business model that offers potential franchisees a truly excellent chance at success. Over the last decade, we’ve greatly refined our systems and processes. The recipe works; new franchisees just need to follow it.

What does a franchise cost?

Training and software R4 000 excl. VAT
Marketing fee 2,5% of TO p/m
Management fee 5% of TO p/m
Establishment cost R950 000 to

R1,3 million

Working capital R150 000
Average time to break-even Three months
Total footprint 61
For more information,

email gbrady@ccholdings.co.za, visit

www.carservicecity.net, or call +27 (0)11 883 3687.

GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.

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Franchisors

How Strong Is Your Franchise’s Quality Control?

Your key objective as a franchisor is ensuring every one of your locations maintain the same quality standards. Why?

Diana Albertyn

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If you’re concerned about brand consistency as your footprint grows and you acquire more franchisees, listen up. While growth is good, keeping tabs on the quality franchisees are providing versus your company-owned locations’ efforts is difficult, but not impossible.

“McDonald’s is among the world’s most quality-oriented brands, but the value proposition and price point aren’t appropriate for steak and lobster,” says Mark Siebert CEO and Senior Franchise Consultant at iFranchise Group, an author of Franchise Your Business, The Guide to Employing the Greatest Growth Strategy Ever.

Related: 3 Ways Communication Helps You Run Your Franchise Better

“There are, however, high-end franchise brands known for detailed attention to quality. Quality is not about what’s on the menu; it’s about consistency of the operation.”

Inconsistency ruins things

Many franchise brands risk failure by not establishing and maintaining quality for each outlet under the network’s guidelines. Regardless of whether a store is run by your company or a franchisee, if there’s glaring inconsistency in service and product quality between different locations, it’s likely to harm your brand’s reputation.

To establish the strength of your quality control standard, ask yourself the following questions:

1. Is your operational training procedure customisable?

Acquiring new franchisees is a chance to cement your training and quality processes and establish if these can be standardised, or if customisation is necessary.

“Training is equally as important as franchisee selection when it comes to maintaining the brand. The best franchisors routinely provide the most – and the most comprehensive – training to their franchisees,” says Siebert. “If standards aren’t rigorously enforced from day one, chances are these standards will continue to slip, and in the process, they’ll become more and more difficult to maintain.”

Because different locations present varying climates and market preferences, remember to customise your training materials based on respective franchisees’ markets, keeping in mind to remain consistent with your brand’s core identity.

2. Have you provided the right tools in the franchisee manual?

Duplicating your franchise’s success relies heavily on mapping out the roadmap for your franchisees and their employees to follow. The right tools will most likely yield the same results you have achieved.

“Documenting systems of operation lend a big hand in a quality control,” says Siebert. “A robust manual has multi-fold benefits and not only serves as a blueprint for operation, but as an ongoing piece of reference for even the most established franchisee, becoming the default go-to in most every scenario.”

Related: 3 Core Strategies For Building Successful Franchise Organisations

3. Do you understand the role of supporting each franchisee?

Whether you choose to conduct on-site field visits, offer master classes like Nando’s, or check in via email or phone monthly, the ultimate goal should be aiming for higher-quality and more profitable franchisees through ongoing support and reinforcement of brand standards.

Quality control is all about commitment. For a good franchisee, that commitment comes naturally. For the franchisor, it comes at a price. But franchisors who are willing to pay that price will find their ability to build a quality brand greatly enhanced,” says Siebert.

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Franchisors

Could Semi-Absentee Franchise Ownership Be For You?

Ready to become your own boss…for only 15 hours a week? Yes, you can become a franchisee while still clocking into work. Here’s how.

Diana Albertyn

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If you want to keep your current job while owning your own franchise, you may want to look into semi-absentee franchising.

“A semi-absentee model allows you to work on the franchise for ten to 15 hours per week while continuing full-time employment. Then when the time is right, you can exit your day job to focus entirely on your business,” explains Jim Judy, a consultant at Franchoice.

When you have a capable manager to oversee the daily operations of the business, you have the flexibility to work your full-time job and ownership of a fully-fledged business. But first, the following considerations need to be made:

Related: 3 Things You Should Consider Before Buying Your First Franchise

How will the decision affect your finances?

While being a semi-absentee franchise owner may require less from you in terms of time, the financial commitment is the same as investing in a franchise as an owner-operator. The decision to become a semi-absentee franchisee should not be made before examining your needs, goals and expectations of the business. Asking yourself the following:

  • Do I want to become a franchise empire builder?
  • Would I like to build numerous concepts?
  • How much capital do I have to invest?

Keep in mind that semi-absentee models may take longer to turn a stable profit if you’re not giving it your full attention due to spending less time working on the business.

“Semi-absentee business models are also expensive,” says Heather Rosen, president of FranNet of Virginia, a franchise advisory firm. “Because the owner must not only rent the space but hire a competent manager.”

Do you have the necessary skillset?

The key to managing a franchise while at you have a full-time corporate job is having impeccable people management skills. This is because having a manager run your business while you oversee them requires you to be comfortable with delegating and trusting that they will handle the day-to-day operations of your business.

Related: The Secret Sauce To Great Franchise Leadership

In addition to people skills, you may think certain talents are required before calling yourself a business owner, but each franchise is different.

“Some franchisees find that the available training and the business concept allows them to use their particular talents and skills to enter semi-absentee franchising without management or business ownership experience,” say experts at Franchise Direct.

Can you balance your schedule adequately?

Even if your plan is to one day leave your job and become an owner-operator of your franchise, while you’re still on your employer’s payroll, you will need to work out ways to handle your nine-to-five tasks with your business’ success. This is an important aspect of choosing the kind of franchise to purchase. While most semi-franchisee suitable options are in retail or the service industry, ensure you’re able to keep track of the business remotely and can periodically check in on how things are going.

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Franchisors

Insights On Recruitment That Could Affect Franchise Performance

A critical aspect of operating any successful franchise chain is getting the right franchisees on board.

Diana Albertyn

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You’re facing a lot of competition as the franchising industry continues to grow. International brands, local giants, and new innovative entrants to the market require you to step up your game. Not only are you geared for growth, but you need your new locations to compete with the best.

“One of the success factors for franchise systems is market penetration which is often achieved through expansion, by opening new stores with quality standards that match the brand – through franchisees,” says Ethel Nyembe, Head: Sales Optimisation and Planning at Standard Bank Group. “The wrong fit, however, can seriously set a franchise’s growth back many years or cause irreparable damage to its reputation.”

Related: 3 Things You Should Consider Before Buying Your First Franchise

Besides the challenge of trying to make your brand more appealing to franchisees in a competitive market, acquiring the right candidates to join your franchise requires the following:

1. Draw up (and adhere to) a checklist

Not all franchisees are created equal, and even a candidate with previous franchising experience may not be the right fit for your particular brand. Alternatively, you can decide to train a potential franchisee if you see potential.

When narrowing down your list of franchisee candidates, consider the importance of this:

  • How important is prior experience in terms of the franchisee’s ability to become profitable in their first year?
  • Does he or she have the necessary resources to train and support the franchise?

“You need to be clear about what you want; don’t compromise on your required skills, priority traits and qualifying requirements,” advises Nyembe. “There’s too much at stake financially and reputation-wise to settle for second best.”

2. Network in the right circles

Sometimes, if the talent doesn’t come to you, it’s beneficial to seek it out physically. Industry events are a great place to come into contact with people aiming to own and run their own franchise. If not, your presence at these functions will expose your brand to more potential people to do business with.

“During key annual industry conferences and trade shows (such as The International Franchise Expo), make a point to send attendees, to sponsor or to exhibit in order to increase brand visibility,” advises Nyembe. “Also consider participating in panel discussions.”

Related: (Infographic) 7 Digital Marketing Strategies For Franchises

3. Get to know your new brand representatives

While personality tests and numerous meetings can give you an idea of whether you’re choosing the right candidate, it’s important to consider taking a more advanced approach to franchisee recruitment.

“Selecting the right candidates to represent your brand is critical to your operation’s ongoing success,” says Sue McConnachie, Vice President, Quality Credit Services Limited. “These franchisees will be the face of your company and you need to trust that they will maintain your brand image.”

The selection of franchisees is crucial because, as it carries both long- and short-term implications, including:

  • Reducing franchisee failure and turnover, while increasing success and profitability
  • Protecting and developing your brand’s reputation
  • Focusing your resources on business planning and management instead of problem-solving
  • Decreasing exposure to legal implications when a franchisee’s conduct is negative or their franchise is unsuccessful
  • Minimising legal and collection claims against delinquent franchisees.

Selecting your next set of franchisees requires establishing a checklist before viewing any CVs, dedicating time to seek out potential franchisees, and ensure you’re choosing people who will take as much pride in your brand as you do.

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